Another month has passed by, and it’s time for me to post an article on my favorite subject: dividend income. The reason why I love to post articles on dividend income is because it’s pure numbers. It’s hard to argue the success of long-term dividend growth investing when you can slowly and surely see dividend income rise over time and get closer to covering one’s expenses.
August was a really great month. I had a huge improvement over last August’s numbers, and progress year-over-year is really what I’m looking at when I publish these reports. Dividend growth investing is designed to drive ever higher dividend income, and when I see much bigger numbers when comparing the same months YOY I get really excited. It’s a dream slowly coming true!
I hope these monthly dividend income reports provide inspiration for any investors out there that are just starting out. It’s easy to see these payments rising month after month and it shows that it’s possible to one day pay for monthly expenses with dividends, which would provide an investor opportunities and freedom to pursue other interests than full-time work. Without further ado:
August 2013 Dividends Received
- AT&T Inc. (T) – $22.50
- Toronoto-Dominion Bank (TD) – $12.04
- Vodafone Group Plc (VOD) – $156.40
- Raytheon Company (RTN) – $13.75
- General Dynamics Corporation (GD) – $11.20
- Air Products & Chemicals, Inc. (ADP) – $14.20
- Kinder Morgan Inc. (KMI) – $60.00
- Oneok, Inc. (OKE) – $13.30
- Realty Income Corp. (O) – $7.26
- The Procter & Gamble Company (PG) – $30.68
Total dividends received during the month of August: $341.33
Awesome! That’s a great looking month. I sometimes get wrapped up in my goals and all of the things I want to accomplish down the road, and I forget about how much progress I’ve already made thus far. That’s almost $350 I didn’t have to bust my butt working for. If I could go back in time and tell the me of three years ago that I would already be earning that much dividend income I’d probably laugh. I mean, that kind of income can pay for some serious bills indefinitely. Cell phone? Check. Electric bill? Check. Gas? Check. I’m really blessed to have come so far so fast.
This was a really great improvement over the $208.65 I earned in August of 2012. That’s a full 63.6% increase in dividends YOY. Of course, a lot of that was primarily driven by a huge semi-annual payout by VOD, but I was invested in them last year as well. I just didn’t have as large of a position as I do now. That may change in the future as they have decided to sell off the crown jewel in the 45% ownership of Verizon Wireless.
I was able to cover about 20% of my expenses via dividends this past month. Of course, I’m aiming to cover 100% or more one day, but 20% is 1/5 of the way there and a fantastic start!
My goal is to receive $3,500 in dividends during the year of 2013. With August behind us, we only have four months left in the year. So far in 2013 my portfolio has generated $2,246.45 in passive income via dividends. That means I’m about 64.2% of the way to completing my goal with 66.6% of the year behind us. I’m a little behind schedule, but I’m confident with all the equities I’ve been buying up lately that I’ll exceed my goal. We’ll see how it goes!
I’ll update my dividend income page to reflect August’s dividends.
Full Disclosure: Long all aforementioned securities.
How was your August? A great month of dividend income?
Thanks for reading.
Photo Credit: sscreation’s/FreeDigitalPhotos.net
Awesome update, nicely done! Do you keep track of your annual forward rates in these monthly updates?
Great work Jason! You’ve made some real progress over last year. It’s incredible how reinvested income can snowball over time. Some of the investments I made in 2008 are now yielding big money on the back of increased dividends and reinvested income.
I wanted to ask if you have to file a “K” as a result of your investment in MLPs
Cheers
fastweekly.blogspot.com
Great update. I just started dividend investing. I only made $2.66 last month. 🙂
DM,
Great update. Your monthly Dividend Income Updates are probably my favorite posts (in addition to the Recent Buy posts). 20% coverage of your expenses is truly great. Congrats on the great progress!
Sincerely,
Ian
Great job! Your updates ARE inspiring. I don’t have a blog so if you don’t mind, I’ll celebrate on yours. August was the first month in which I collected over $100 in dividends. It is more than double what I received last August. As you mention, it is challenging to not get so focused on where we want to be in the future that we forget to look back at how far we’ve come. My dividend growth is much slower than yours because I am also paying down a mortgage and contributing to my 401k. But I do manage to save between 30% and 50% of each month’s income between these three so I’m pleased.
I have already passed my yearly dividend goal of $700 so everything from here is gravy. I already have my goal for next year set. Getting $100 this month was nice but I want at least $100 EVERY month! $1200 is the goal next year. We’ll see what happens.
Enjoy your posts. Keep up the good work.
Steve
Very nice month DM!
I am quite sure you will destroy your goal of $3500 and thats mostly due to VOD next month dividend. Its a shame for VOD sold their crown jewel like that, but hey its nothing personal, strictly business. Anyhow, as of now there are only 2 oligopolies in communications and they are T & VZ. With VZs great acquisition they are set for success for a long time to come. Long VZ
Another nice month for dividends I see. Your kicking butt man. Curious what that yield was on this months VOD payment. Sheesh
Seeing the dividends total increase month after money and year over year it is always great to see.
Right on Mantra – keep up the good work and keep going! 🙂
Don’t forget your website, it also pays you monthly cash flow. Part of your Freedom Fund too. 😉
Yah what’s with the VOD dividend?
Cheers
Avrom
Great goal: $3,500 in dividends during the year of 2013.
I’ve got quite a few years ahead of you, so I need to stay ahead of you… 🙂
Hoping for $7,500 in dividend income this year. We’ll see. I just need to keep my head down and keep saving. I should have a dividend income update this week or next for August 2013.
Continued great work Jason!
Mark
Hey DM,
This is awesome! Very inspiring. What are your thoughts on Exxon (XOM) at current price levels?
Dividend Dream,
Thanks so much!
I don’t keep track of forward annual dividend rates in these updates because it’s not actually money in my pocket. At least not yet. These updates are nice because it’s money that actually already hit my account and has already been reinvested. Forward dividends are nice to look at, but they aren’t “money in the bank”.
Best wishes!
The Fast Weekly,
I appreciate the support! The progress has been amazing. I’m really, truly blessed to make a decent income and be able to invest a good portion of it in high quality companies.
I don’t have any K-1’s to file because KMI and OKE are normal C-corps and represent the general partner interests in the partnerships. That’s one reason I prefer them, but certainly not the only reason or even the first reason.
Take care!
Felix,
That’s awesome. I remember just starting like it was yesterday. I mean that! The progress happens quickly. Just stay persistent and you’ll see hundreds of dollars hitting your account in no time. I’m the proof in the pudding. 🙂
If you’re looking for a little inspiration, you can go back to some of my earliest dividend income reports where I was only collecting around $30. That was a little over two years ago.
Stick with it!
Best regards.
Ian,
Thanks so much! I really appreciate the kind words.
These are my favorite posts to write. I only wish they came around more than once a month! 🙂
Hopefully your dreams are coming true one day at a time as well.
Cheers!
Steve,
I’m glad you find inspiration here. That’s the primary reason I spend so much time on this blog and write the articles I do. I’m really happy to hear that!
That’s awesome that you’re experiencing such progress! It happens very quickly, as you can tell by my history. $1,200 would be a fantastic goal. That was actually my same goal for the year of 2011. I just barely hit it!
Keep it up. Keep reinvesting those dividends and keep up the phenomenal savings rate. You’re well on your way!
Best wishes.
DividendVet,
I’m not aware of any dividend from VOD next month. VOD pays semi-annually with the dividend recorded above being the final, and larger payout for the year. The VZ shares and cash from the Verizon Wireless sale won’t close until 1Q 2014. So, that will impact my dividend numbers for 2014, but only at the expense of my overall investment in VOD.
I’m not sure if I’ll keep my VZ shares or not. I like the business model and I like the dividend. However, I’m a bit concerned about the price they paid for the 45% of VZW and the debt load. We’ll see how I feel when the time comes. I’ll be thinking about it in the meanwhile.
Thanks for stopping by!
Take care.
Captain Dividend,
Thanks! It was a great month, and September is going to be even better. I’m really excited to have two big months back-to-back! 🙂
The VOD dividend is paid semi-annually with an interim dividend and a bigger, final dividend. The dividend payment you see above is the final dividend for the year. I think last I looked, VOD’s yield was somewhere just above 5% or so. It depends on exchange rates as well, as they are U.K. based and pay in pence.
It looks like you had a pretty good August as well. Keep it up!
Cheers.
Investing Pursuits,
Absolutely. That’s what I really try to focus on: increases YOY. The months will oscillate depending on payout schedules, with the last month in each quarter generally being the largest. So, focusing on monthly changes isn’t particularly telling or helpful. But, looking at YOY changes really shows you the growth.
Best wishes!
Avrom,
Thanks for stopping by!
I appreciate the support. It’s been an amazing journey so far. The website is definitely helping. I never would have dreamed I could make a decent little side income from blogging, but I’m really fortunate!
I assume you’re talking about the special dividend after the VZW asset sale. That won’t close until 1Q 2014, so I have a little while yet before I see the cash and VZ shares from that. As I recently wrote about, I’m not particularly excited about the whole thing and I’m not real sure how far ahead I’ll be. I would have preferred VOD stay intact, but it is what it is.
Hope you enjoyed your weekend!
Best regards.
Mark,
Congrats to you. You’ve achieved a very, very nice dividend income there. I hope you continue to stay ahead of me for a while. Gives me a target to shoot for! 🙂
Keep up the great work.
Cheers!
Anonymous,
I like XOM here. They had a bad last quarter, so the valuation in terms of P/E and what not has spiked, but it’s still a very, very high quality company. I wouldn’t mind buying into the company at all at these prices and I was actually looking at it and BP last week but I haven’t pulled the trigger on anything as of yet. I think mid-$80’s on XOM is a nice entry price. Of course, anything can happen to oil prices, but XOM has continued to increase its dividend through peaks and troughs for decades. I don’t see any reason that won’t continue.
Take care!
Excellent! Look at it another way, you made about the same amount as someone working their butt off at McDonald’s earning minimum wage for a week…awesome!
RJ,
You got it right! I’ve talked about that before – my dividends are basically an extra person in my house going out there and working a part-time job and giving me all of their income. Better yet, they don’t require any food or use any electricity or anything else. I just get the paychecks. It’s a very nice arrangement. 🙂
Best wishes!
Awesome job DM! To really get you fired up about this accomplishment – In Thailand that will cover eating out for every meal (if you eat where the locals eat) and cover your housing. This is exciting stuff!
Keep up the great work. You are definitely keeping me inspired and focused and I thank you for that. Reading this blog has increased my knowledge base on dividends. I’ve also listened to all of the podcast you and Kraig have made which I enjoyed listening to.
By the way, I can commiserate with you on spending an inheritance in a very short period of time. I received an inheritance after the loss of my Mother at age 23 and blew it in no time. If I could have only had the same mindset then that I have now. Well, we live and we learn don’t we? I think insurance companies should require people to read “Your Money or Your LIfe” before they issue payment to a beneficiary.
Congrats,
Nomad
Nomad,
How awesome is that? Maximizing your passive income as early as possible means a whole world of opportunities open up for you. Geographical arbitrage is certainly something that allows one to potentially retire in life even earlier. 🙂
I’m glad you enjoy the blog and the podcasts. Inspiring others is why I do it. I had to start somewhere, and it was the books and blogs out there that I had read during my start that initially inspired me. I guess I’m just paying it forward in a way.
Sorry to hear you also had a rough time with an inheritance. I guess I can only say how much better of a life less on money can you have than to get a bunch of money young and blow it all? A rather expensive lesson, but really effective!
It sounds like you’re well on your way to right past mistakes. Keep it up. I look forward to hearing more of your adventures! 🙂
Best regards.
Nomad here again – I’m sure you knew I was referring to a month worth of the aforementioned expenses. Just thought I would clarify that before anyone misunderstood.
Love your blog. It and your lifestyle and goals are inspiring.
How do you calculate “weight”?
Which is preferable? A higher or a lower percent?
Many thanks,
Anita
Getting 20% of your expenses covered by dividends is pretty sweet. I think you are doing the right thing in giving this milestone some perspective, your former self would indeed be incredulous.
When that percentage starts climbing above 50%, then even more awesome things will start happening, serious compounding will be one of them. I don’t know about you, but when I reach 80% of my goal then it will feel like I’m just knocking on FI’s door. The remaining 20% will not feel all that far away. Maybe I might feel like I’m on the “downhill” side of my journey.
I pulled the trigger on BP last month, and I will circle back and fill out my CVX/XOM positions soon as well.
Yay! A great update, thanks! This has definitely become my all time favorite blog, I believe it would be true at whatever level of investment I hold in the market ($100K, $200K, $500K, $3M). Of course I would always peek at others and gain other insights but this is definitely one of the blogs that makes me feel I don’t need to blog anything about what I am doing!
Jason, in comments section of this blog and some other blogs, many dividend investors also using options covered call strategy. Do you use it? Your opinion on this?
Is anyone able to short Tesla (TSLA)? Schwabb says I need $50K to do it. $50K??!!
Anybody else try?
Katz,
I keep looking at BP. That yield is lovely, but I’m still concerned about the way the litigation is going. It seems like they’re not having a very good go of it in court, and rightfully so. I’m confident BP will come out of it okay, but I don’t know when things will turn. For now, the negative FCF and uncertainty are both worrisome. However, they do have a nice 20% investment in Rosneft, although that’s still primarily owned by the Russian government.
Seth Klarman is a big fan of BP. That says something.
Best regards.
Anita,
Glad you enjoy the blog and find inspiration in what I do. 🙂
I calculate weight simply by dividing the size of an individual investment (in dollar terms) by the total value of my portfolio. I don’t weight by dividends.
As far as what’s preferable, I’m trying to slowly get the weightings fairly close to even, although some stalwarts (PG, MCD, PEP, PM, JNJ) will always retain a higher allocation than investments I perceive to be riskier (SBSI, BBL).
I hope that helps!
Take care.
Spoonman,
You nailed it. I always try to keep perspective, but I get lost in my own head sometimes. It’s important to come back down to the ground when you’re floating in the clouds.
I hear you. Getting to 80% will be amazing. You’re not too far away from that from what I could tell the last I looked at your ERE journal. You’re getting very close. Keep up the great work.
Cheers!
Katz,
Thanks for the amazing compliment there! I’m really lucky to have wonderful readers like you. Without you guys this blog likely wouldn’t exist at all. Thank you for the continued support!
I’m glad you enjoy your time here. I always hoped my transparency, honesty and humbleness would attract an audience because it’s tough to find such qualities in personal finance circles. There’s a lot of hiding numbers, being vague and using complicated terms to seemingly confuse people. I don’t think personal finance needs to be vague or confusing at all. 🙂
Thanks again!
Best wishes.
gibor,
I don’t use options because I don’t like to cap my upside. I prefer to go long and reinvest my dividends along the way, building long-term positions in high quality companies. I think there’s a lot of things to like about options, but I’ll be living off of my dividend income and not option income (for obvious reasons). Part of my strategy is to keep things as simple as possible, and maybe that’s what’s so approachable about what I’m doing. 🙂
Best regards.
Anonymous,
I don’t short any stocks, as I don’t look to hedge my bets that way. Perhaps others can comment.
Cheers!
I keep looking at shorting and every time I don’t like it. I am not looking for companies that lose or dip down other then to buy more of them. As for options, the one that made sense is puts and calls as long as it potentially leads to purchasing the position, but even that gets a bit distasteful. Here is why I think so. They always talk about gaining an extra 15-20% annually by using those methods, however, you can only do that so many times per month/quarter/year, so the amount of effort vs the amount of return seems to be high, and the involvement is high, much higher than buying a good dividend position and letting those dividends roll in for 5-80 years! Also, at this point in my life there are other things I can do to generate an extra $100-300 if I look around (consulting and so forth) so it seems like I should get out and do that instead while I can!
That is my 2cents on it, others seem to be quite joyful in the calls and puts deal.
Best regards!
Hi Jason,
I have a question about cash and dips. In the Asset Allocation model I aspire to (not yet reached) a lot of cash is required at any given time. And when I consider there will be market dips from time to time that cash needs to be liquid enough to pull from within 2-3 days (that’s the float time my brokerage allows on my account). But having cash around above my “Emergency Fund” is basically subject to Inflation loss. But looking back as I have bought a few dips, like Microsoft and Cisco, 12% and around 9% respectively, if I didn’t have that cash on hand I couldn’t have bought those dips. The Model, incidentally, calls for a significant portion of the portfolio to be in Real Estate, which usually serves as a hedge against stocks…but not always!
If anyone wants to understand what I am referring to it is the Talmud Asset Allocation Model, you can read it briefly here: http://www.joshuakennon.com/the-talmud-asset-allocation-model-portfolio/
I was thinking of the bad taste I get when all that cash is sitting there, losing 3% or so on that fuzzy inflation figure! So I was thinking to perhaps just buy, over buy, one or two of my most stable positions and then be able to sell and buy from there when a dip occurs. Of course that carries a bit more risk and a potential taxable event every time cash is needed (15% of profit vs losing 3% on gross/annually, I believe it might be better to pay the tax!).
At any rate those are my thoughts, I would appreciate anyone who cares to comment on this, thanks in advance!
~Katz
ps – I looked at holding Muni’s or other Bonds instead of cash but these days that has not looked so good, best ones I have seen seem to shave a percentage off the top (not load, just NAV fluctuation) and sometimes it goes up and sometimes down and long stretches of time between. I am not a money manager so whereas I do keep a portion of my portfolio in Munis and Bonds (now short to medium term bonds mostly) I don’t think I could consider that a cash or cash equivalent as most schools seem to. Incidentally I had an argument with one brokerage who posted a “Safety Net” strategy using 60% bonds/40% stocks and then they casually slipped in “Emergency Fund” language in the same post! I blasted the guy and said people need to understand what an Emergency Fund is and have one and the Safety Net they are talking about has nothing to do with it!
Comments much appreciated!
~Katz
I have $20,045.48 invested as of today and I’m only 20
I just placed that order no problem with Ameritrade. It was after hours though so it didn’t get settled of course.
That stock has had a hell of a run (4 bagger) since April WOW!
yet your post makes you seem 10
I love you.
These are my favorite posts — so inspiring! That’s an interesting note about VOD. I’d forgotten about that. What do you think you’ll do?
Congratulations! That’s great progress. I love reading about these kind of success stories. Motivates me that much more towards my personal financial goals! Keep up the great work!
Katz,
What you’re touching on is the delicate balance between having enough cash to strike on dips, and having too much to where you’re impacting your long-term returns. We all have different comfort levels, and I’m probably a bit extreme with my almost 100% allocation to equities.
The longer I do this, the more I’d like to target about 5% or so in cash on average. That’s an average spread out over the long haul, whereby the cash position would go over 5% during times where I perceive a lack of value and subsequently would go under 5% when I’m using the capital to aggressively purchase during times of fear. Since the beginning, I’ve invested all my cash almost whenever it’s become available to me, but as my portfolio grows I think I can relax a bit and target about 5% or so in cash. Right now I’m sitting at about 1.4%. So, I have a long way to go here. The cash position could be slowly built during times of greed by purchasing less aggressively.
This 5% would be separate from my emergency fund. I only target a few grand or so as emergency funds, as I have quite a bit of easy credit available to me and my high savings rate also provides an ongoing cushion to help alleviate any small blows.
Hope that helps!
Best regards.
Katz,
I meant to mention that furthermore on the emergency fund issue that I don’t own a home or car, so I feel the need to keep a lot of cash on the side to be unnecessary. I also don’t have any children. All of these things impact my decision on how much cash I feel I need.
Take care!
Anonymous,
You’re off to a great start, but try not to think about how much you have invested. Try to think about how much passive income you’re currently generating and how much you’ll eventually need to live off of. Closing that gap is key.
Take care.
Pretired Nick,
Thanks! So glad you find inspiration here. That’s why I write. 🙂
I’m still mulling over VOD. If it runs up before the closing of the VZW transaction in 1Q 2014 I may sell. I think a lot of the value is already priced into the shares based on all known factors. Plus, I’d have to think about potential short-term capital gains on the sale of the VZ shares. We shall see.
Thanks for stopping by!
Best regards.
Teach Me To Invest,
Thanks so much! I’m honestly blessed to be in the situation I’m in right now. I’m making more than I thought I ever would, and therefore I’m able to invest more than I ever thought I’d be able to. I’m really lucky right now, and I’m just trying to capitalize on that luck as much as I can.
Part of my success is really due to readers like yourself. If it weren’t for the support that many of you readers provide I probably wouldn’t be as far along as I am right now. So, thanks!
Best wishes.
DM, compared to your achievements I am well behind, so i am boosting it with more riskier stocks and stocks paying monthly to speed up compounding.
But great results man!
Martin,
No need to compare yourself to me or anyone else. Rather, you should only compare yourself to the goals you set up for yourself. 🙂
That being said, I’m far behind other people who are kicking my butt. We all have different means, and mine fall probably somewhere in the middle. I’m making the most of my opportunities, and that’s what I really look at.
Keep up the great work. That snowball will build to a monster one day!
Take care.
DM!
Great month in August! I expect that both of our Septembers will most likely be a monthly record in dividends we receive. It is the big month with a lot of solid companies paying out. How about that Realty Income small dividend boost? That puts a smile on our faces doesn’t it?
SWAN,
It looks like you had a great month too! Congrats on that. You have a boatload of monthly payers. Very nice! 🙂
Yeah, that boost by O was very nice. It was small, but when you’re boosting every month those little increases compound over time and add up.
I’m definitely looking forward to September. It’s shaping up to be a record month. I’m excited! Best of luck to you in September as well. It’s gonna be a lot of fun to publish that dividend update in October!
Best wishes.
August is a hobbo month for me haha. More seriously it’s the weakest month along with September.
Congrats
JF Baconnet,
August was only a big month for me because of that huge semi-annual VOD dividend. Without that it would have been a very lackluster month. We’ll see how next August looks after my VOD investment shrinks.
Best regards!
Just few quick Qs for you:
1. Where can I see a breakdown of your portfolio? Specifically how much total $$ figure you have invested in dividend generating portfolio.
2. Do you think it is better to wait for x months to let the market hit some sort of low point before jumping in or is to better to start the portfolio building NOW
Anonymous,
You can see my portfolio at any time by clicking the ‘Portfolio’ tab at the top of the page. Or see here:
https://www.dividendmantra.com/p/portfolio.html
As far as whether or not to invest now, you can see all of my recent moves. I prefer to let my actions speak for me. 🙂
Best wishes.